The 210-room hotel, in an effort to boost business, is offering San Diego County residents a discounted rate and other perks.
/ San Diego Union-Tribune

As San Diego hoteliers regroup from a financially painful summer, consumers can expect a continued stream of attractive discounts designed to fill empty rooms.

With no near-term end in sight for the tourism industry doldrums, hotel operators are acting aggressively to induce visitors to seek out San Diego as a destination. While actively engaged in cost-cutting, the lodging industry still must significantly lower room rates at a time when budget-conscious travelers have come to expect travel deals.

“In my experience, I've never seen the discounting and significant offers in the marketplace go so deep. You're seeing very aggressive offers from Thanksgiving through the end of the year,” said Joe Terzi, president of the San Diego Convention & Visitors Bureau. “Hotels are looking for any rock they can turn over to find a customer, but in a tough time, you have to ask yourself, ‘Am I building more business or am I just discounting to an existing customer?’ ”

While San Diego is clearly a popular summer destination, hotels were less full during June, July and August than they were a year ago. And because operators had to lower room rates to attract guests, revenue plunged nearly 23 percent, according to Smith Travel Research, which tracks hotel performance trends.

Revenue per hotel room during the summer averaged $98.35 a night, compared with $127.20 a year earlier, a drop of 22.7 percent, Smith Travel found. In California, only the San Francisco Bay Area fared worse, with a decline of 22.9 percent.

Hotels are now entering a far slower period when occupancies can fall to as low as 50 percent, Terzi said. As a result, they are fighting back with discounts, many of which will remain in place beyond the end of the year.

The Town and Country Resort, for example, is offering rooms for as low as $79 a night, a 40 percent discount, through Feb. 28. The Loews Coronado Resort also is advertising 40 percent off room rates, a promotion that will last through the end of the year.

And for San Diego County residents looking to pamper themselves with a “staycation,” the 210-room Estancia La Jolla Hotel & Spa in La Jolla offers a discounted rate, plus it waives fees for parking, wireless Internet, the health club and coffee service, said Dave Gerdes, regional director of sales and marketing.

“We're up at Torrey Pines, and it seemed like the U.S. Open (in 2008) was the crest of the wave, and then everything came crashing down, if you will,” Gerdes said. “I've been in this business 25 years, and I've never seen anything as widespread and ongoing as this.”

While rates at the Estancia in general are 20 percent to 25 percent off what they were last year, some will be discounted as much as 50 percent through the end of the year, Gerdes added.

“You'll see rates as low as $119, $129,” he said. “This time last year, we were pushing $199, if not higher. Let's face it: If businesses are still letting people go, they're not going to be spending a lot on travel, and individuals aren't going to spend as much.”